6 Rules Of Financial Minimalism

a lot of people will give us financial advice from our friends to our families to random people on the internet but what if most of what you have heard is completely wrong and there's a different way to live life minimalism has become really popular because of all the amazing benefits it can give to your personal life but today I wanted to look at those same principles of minimalism and apply those to our financial life and how you can really get an insane amount of freedom and completely turn your life around within a few years just from looking at these principles and really getting spending under control earning more and then learning how to invest and how you can take that to completely transform your life discover your why so usually when people start minimalism it's because something happened in their life maybe it was a tragedy or maybe they just got to the point where they decided I want to have less clutter around my life something's not right I need to make some drastic changes in order to improve my life and usually it's the same thing with your financial situation you'll get to the point where you're saying I don't want to work till I'm 65 I don't want to give the best part of every single day of my life to earn money and then never have enough of it I really need to make some changes so I think their first step is understanding your why understanding why you need to make a change whether you want to have more time with your family you just want to work less you want to take back control over your life you want to be able to travel more what is you remain why and that will make a huge impact as we go to the other rules have a strong and simple plan a wise man once said that if you don't know where you're trying to go how will you know when you get there so I think it's really important to have a clear and simple plan of where you're trying to go so you can't just really say I want to have a better life I want to have more money that's not really a goal you need to decide what your actual goal is so that you can figure out the steps in order to get to that goal so let's say you want to be out of your job that you don't like in the next three years well in order to do that what are you going to need to change like how much money are you going to need in order to be out of that job for instance when it was me for my job I said if I can get my expenses down to $2,000 a month and then I can buy two mental properties and that will earn me $2,000 a month then I'll have all my living expenses covered and I could leave my day job and I can just do side hustles and things that I'm actually really interested in and that'll make up whatever difference that I need and I think pretty much anybody in the world can do that within you know three to five years you can get your expenses low enough and then your passive income high enough the real estate investing to be able to leave your job now that's not for everybody for some of you will might be I need to start a business or I need to start investing in the stock market or whatever your plan is but you need to have a plan to get your expenses down so that you don't need as much money in order to survive on that way you're able to leave your job sooner or whatever your goals are for you I think just having that overarching goal and then breaking down the steps is a great way to get there that's right I'm joining the floor gang decluttering is something that super super important I know when I first did it when I was beginning my minimalist track that I am on here it really made a big difference and you feel a lot less cluttered a lot less weighed down in your personal life it just struck me that the shop probably would have been just as nice if I was sitting on the couch but there's something minimalist about you know sitting on the floor why do all the minimalist thumbnails have people sitting on the floor with a white background every single one of them doesn't matter what the topics about the thumbnail for this video will probably be me sitting on the floor like hold me money or something it's just what gets clicks it's really weird anyways it really made a big impact on my life and I felt less stress less weighed down I had more freedom I only had the stuff that I really liked and brought me joy and value and I'm still on that path I'm still working on bettering myself you know I'm having less stuff and I do have too much stuff right now I'm slowly working on getting it down but I think decluttering your finances is also just as important and has just as many benefits so when you're trying to declutter your finances you want to go through your budget your expenses your last bill from your credit card and look at each and every line item and ask does this bring joy and value to me and that's not just the things that the lattes the shirts and all that type of stuff which is absolutely important look at and say you know should I have spent as much money on Amazon all those things are important they do add up but you also have to look at the big items as well like your housing payment your car payment and realize if I didn't have this car payment and I found out a different way you know to get a car cheaper could I work one day less a week and have that much more freedom in my life would that bring me a lot of joy and value or could I leave my job you know five years earlier if I didn't have this or if I had a smaller house could I work one more last day a week you know cuz that's a thousand dollars between the two of them right there if you go from a $1,500 payment to a thousand dollar payment and you get rid of your $500 a month car payment because you you know got cash you got an older car something like that if you're able to get all your expenses down then you have so much more freedom you have the money to invest you have the money to save up and have that security in case you know the world shuts down you have all those same benefits of having less stress having more freedom having you know the things that you spend money on you really feel good about and you don't feel guilty about them anymore if you want to go extreme this try closing your bank account or closing your credit cards and then only start things back up again when you realize that is essential and that it's super super important or it's gonna bring you you like a ton of value so maybe you have gym memberships and all these subscriptions these different things and you and you cancel your credit cards and now they all stop you're gonna realize really quickly which ones hey I was using Netflix every single day and I was getting a ton of value out of that you know I like that I had fun with family with it I'm gonna get Netflix again but you know what I just realized that I never listened to you know my spotify premium in my audible this and you know like all those other things my gym membership I haven't used it in six months all those different things and you realize what's super super important by cutting everything and then only going back on the things that really add a lot of value to you so that's just something that I've done a few different times and I would highly recommend it really helps if you guys are enjoying this video and you want to support the channel please consider liking and subscribing [Music] this will change your relationship with money and every time you spend you will think a little bit differently and you'll ask that question is this worth five dollars of freedom is this worth ten dollars or hundred dollars or a thousand dollars of my freedom and if not you don't spend on it so not only are you looking at will this clutter up my home does this bring me joy and value but you're also asking does this bring me enough value that I can sacrifice a little bit of my freedom for it because do you have to realize that every dollar that you have you had to earn a dollar 30 in order to get that dollar so let's say you spend a hundred dollars on something that's actually 130 dollars that you had to earn because of taxes you know you gotta love taxes and then there's also the opportunity cost that you're missing out on where if you invested this hundred dollars now in five years it might be 120 in ten years it might be 200 or 400 and in 30 years it might be multiple thousands of dollars that you're spending right now so every time you're looking at that $5 to wat say it might be a fifty dollar latte in ten years so there is that balance of some things you do need to spend money on you doing need to enjoy life now but you also are gonna need to make sacrifices if you want to be one of those people who are able to retire in their 20s or 30s or at least leave their job and do something that they love kind of like what I've done almost has nothing to do with how much money you're making it really comes down to how much money that you're spending if you can get your spending down to that $2,000 a month range and you can figure out a way to make $2,000 a month possibly which anybody can do in three to five years then at that point you've reached financial freedom pretty much and you've taken back your life you've taken back your time you can do whatever fulfills you and whatever you enjoy and whatever brings value to other people make a simple straightforward system I'm sure I'm not the first person who's gone through and decluttered a ton of stuff in their house and then a week later maybe two weeks maybe the next day things get out of hand again in your back where you started and the solution I've found for that is to have a system and have a place for everything so that way things don't get on the car and they don't get left around if everything has a place and there's a system where you don't just throw your mail on the table where it goes in its own slot and everything is systematized it makes things a lot simpler after you set up that system it makes everything kind of go on autopilot after that you have to do the same thing with your financial life where you're creating systems you're creating a budget you're creating rules for yourself maybe it's simply choosing a budgeting method maybe you're just using Mint the app I used to use that or maybe you're just using a pad of paper or an excel sheet depending on what works for you and every month you look through your last month of spending and maybe you realize a lot of things that you've spent money on didn't really have any lasting joy any lasting value and you look at that for the future and you try to cut those out never cut out coffee it could just be as simple as setting up things on auto pace that everything is automated you never miss a payment you never accrue that interest if you have a tendency to miss your mortgage payment or your credit card payment or any of those you just set them up on auto pay creating as many systems possible to make things as easy as possible to save as much money as possible can really make a huge impact spend money freely on things that bring you value it's also just as important to decide the things that do bring you that value and are worth spending money on what things really bring you happiness or even if it's donating money what what you think really is gonna make an impact deciding on what those are and then not feeling guilty about spending money on those things this is something that I struggle with where I can do pretty good about cutting down my expenses and saving money as much as possible but when it comes to spending on myself it's something that I have a hard time doing even though I think it's really really important to spend money on things that bring you joy things that bring you value now there's a lot of things that you can do for free that can really make you happy and bring you joy as well but there are some things where money can buy experiences and I think it's really good to build up those memories build up experiences find ways to travel and to spend time with others as much as going out and spending twenty dollars on a meal and a drink is a waste of money when you could have gotten that same stuff for five dollars every once in awhile it's worth it to go out and spend that money if you're gaining a really good experience with your friends or family have a growth mindset most minimalists not only want to better themselves by having less stuff and if you're watching this video probably having more money but also you need to be better as a person because you can be as rich as anybody but if you don't have the right mindset to go along with it it won't really make much difference that's why most people when they win the lottery they're broke within a couple of years because they never changed their mindset they had more money but a lot of times more money won't solve your problems unless you change your life situation and change how you think that's why I listen to audio books and I watch YouTube videos like this one and recently it's time for the ad I've been using a Skillshare recently which is an online learning platform thing where you can take like free classes online for the first two months if you use the link in the description I'd highly recommend that right now I'm doing one on photography I really enjoy that we're trying to be a better photographers and then I'm gonna take a cooking one once I'm finished this one because I like to cook and I just want to be better at it so I think just making sure that you're trying to grow and evolve as a person and not just stopping once you're not forced to learn anymore is what differentiates is what different def differ differ entry differentiates differ hmm you know what I'm trying to say um is its what it's what separates people from you know the average to the above-average and it can make you happier and healthier and just be better for a lot of things in your life so if you guys enjoyed this video feel free to subscribe and you new videos on minimalism and finances every single week so stick around for that and also drop a like if you want to so far I really enjoyed Skillshare so feel free to use the link in the description and is an affiliate link so I do make a little money which helps me make more videos so if you want to support the channel that is a cool way to do it and I'll see you hopefully next week [Music]

Channel: Gabe Bult

Views: 197,559

Keywords: financial minimalism, financial minimalism rules, how to save money, minimalism, minimalist, financial minimalist, minimalist living, frugal, frugal living, minimalist money, minimalist lifestyle, save money, saving money, personal finance, get out of debt, budgeting, money management, personal finance tips, personal finance 101

Id: wj6CbjPmOrE

Length: 12min 56sec (776 seconds)

Published: Mon Jun 01 2020